Addressing the Regressivity of a Value Added Tax (VAT): Lessons from Singapore’s Experience with the Goods and Services Tax (GST)

One of the strongest reservations to the introduction of a broad-based consumption tax in any country will always be the potential regressivity associated with such a tax reform. It is accordingly essential to address these concerns if the reform is to be politically acceptable and socially responsive. Indeed, how a country redresses the regressivity issue is as much a political problem as it is one of economics.